report starting to turn the corner

Highlights:

• A 41% increase in online TTV was accompanied by a planned and managed 35% decrease in offline TTV;

• Online transactions accounted for 75% of total TTV, up from 58% in 2005;

• Operating revenues increased by 14.0% to $9,904,337;

• EBITDA before non-recurring items was $164,770. Reported EBITDA was ($273,882) after net non-recurring expenses of

$438,652;

• A net loss after tax attributable to members of $654,887;

• Material financial improvement with the EBITDA result (before non-recurring items) representing a $504,396 improvement on

2005, and net loss after tax attributable to members reduced by $871,089;

• A significant improvement in the company’s operating platform has been achieved through:

- introduction of new technology;

- continuing focus on online business; and

- the rectification of systemic administrative system problems which resulted in impairments to lastminute.com.au

receivables reported at the half year.

• Improvement in capital position – cash reserves at 30 June 2006 were $6.7 million (2005: $3.4 million);

• Acceleration of online growth strategy with netus Pty Ltd (a News Corporation entity) becoming a significant shareholder in

April 2006; and

• During 2007, TVL will progressively improve its offerings and customer experience. Senior personnel have been recruited

from other leading online sites and are currently implementing a range of initiatives.

Lastminute.com.au TTV increased by 55.7% over 2005, and revenues by 51.4%. The brand has recorded growth in excess of 50%

for the past two financial years and now represents 51% of total group TTV.

In the first half of FY2006, impairments and non-recurring costs totalled $607,288. Prior to the impact of these items,

lastminute.com.au reported an EBITDA profit of $356,591 (2005: EBITDA loss of $331,095). Inclusive of the non-recurring costs,

the brand recorded a $250,697 EBITDA loss for 2006.

Since its formation, the lastminute.com.au joint venture has suffered from systemic administrative system problems resulting from its

reliance on remote systems provided by lastminute.com in the UK. With full support from partner lastminute.com, TVL is now

repatriating management processes and systems to Australia in order to eliminate this problem. Due to significantly improved

management systems, no impairments were incurred in the second half of the financial year.

Shares on issue at 30 June 2006 were 96,942,752 (2005: 71,684,342).

Strategy Acceleration:

The past 18 months has been a period of heavy restructuring at TVL. The company has:

• reduced its cost base;

• introduced new technology through the acquisition of Arnold;

• recruited experienced personnel;

• improved the balance between online and offline revenues;

• remedied systemic administrative problems throughout its business; and

• improved its capital position.

While this restructuring has been effective, leaders in the online travel market have outpaced TVL in revenue and profit growth. The

lastminute.com.au and travel.com.au brands enjoy significant, competitive levels of consumer recognition, with over 630,000

average monthly unique visitors, and TVL must now monetise this strong brand recognition.

Working closely with new shareholder, netus Pty Ltd, the company is now implementing plans to improve its offerings and

accelerate growth.